MARKETING MANAGEMENT(Subject Code: MBADS1-126) → LESSON 6 :Corporate Planning Definition – Strategy, Importance, Objectives and Elements Corporate planning is a type of strategic planning, responsible for mapping out a course of strategies and their implementations to empower top-management. It optimizes exposure, reach, leads, sales, profits, credibility, loyalty, sustainability, and opportunities of a business. With the help of corporate strategic planning, a business can efficiently channelize corporate management by leveraging its resources with better acumen than the other market players. Businesses of any size should incorporate such strategic planning, as it offers- • Clarity & Direction • Efficient use of resources • A way of measuring progress • Optimized decision-making • Better coordination in business activities • Effective allocation of responsibilities • Motivation and guidance to members • Analysis Strengths and weaknesses along with opportunities and threats via SWOT analysis, etc. All in all, corporate planning empowers any kind of business to accomplish its business goals in a more effective and organized manner. Corporate Planning Definition Corporate Planning is defined as forming long-term goals and objectives within the organization’s strengths and weaknesses in the existing and prospective environment. This is done to ensure the achievement of their plans by combining their short-term and long-term objectives or bringing amendments in the structural working in the organization’s composition. In the words of David E. Hussey, writer of the book- Corporate Planning: Theory and Practice- Corporate planning includes the setting of objectives, organizing the work, people and systems to enable those objectives to be achieved, motivating through the planning process and through the plans, measuring performance and so controlling progress of the plans and developing people through better decision-making, clearer objectives, more involvement, and awareness of progress. What is Corporate Planning Strategy? Corporate Planning is a strategic process applied by several business organizations to form a roadmap to grow in the market, enhance profits, gain industrial exposure, and strengthen brand identity. It is a vital tool that successful business organizations use to leverage their existing resources better and more analytically than competitors. It is the determination of business goals, formulation of diverse strategies for attaining objectives, transforming the goals into tactical plans, implementing and reviewing it to find out the progress of strategies, and finding out loopholes. Different factors around which corporate planning is channelized via effective SWOT analysis and process of corporate management are- • Creation of long-range corporate goals and objectives. • Analysis of Macro and Micro Environments. • Analysis of Strengths and weaknesses of the business • Coordination between short term and long term business plans • Structural changes in the business • Implementation of the strategic plan as per business goals • Adept use of scarce financial resources. • Right evaluation of performance as well as feedback for purposeful corporate planning Importance of Strategic Corporate Planning In the current modern era, corporate planning holds a crucial position in a business organization, be it large-sized, medium, or even a new entrant. The importance of corporate planning can be justified because some companies even hire departmental corporate managers to check the industry’s current scenario and the current status of the organization in the market. Some of the points that describe the need and importance of corporate planning are mentioned below: 1. Long-term goals Corporate Planning broadly focuses on long-term goals and sets a blueprint to achieve them in a stipulated period. Long-term goals help an organization keep its core focus on maintaining its efforts, workforce, and efforts on a pre-decided target. Corporate Planning keeps the employees engaged in their respective tasks with deadlines and ensures effectiveness and efficiency. It also brings harmony, peace, and cooperation among the employees and supervisors in a firm as they all smoothly work towards a common objective. 2. Focus A strategic business plan helps a business organization provide a focal point not to get deviated or distracted from its end goal. The first and foremost step of corporate planning involves devising a mission statement that tells the world its roles and objectives. Formulation of a mission statement aids the firm stick to its focus, do all the requisite tasks, assign responsibilities to the employees, and evaluate their work to achieve that final destination. 3. Better Decisions Developing a strategic plan helps a company make better decisions that are beneficial and helpful in attaining the mission statement. A corporate plan should be structured to spell all the information in the organization’s interest, like the skills required with the employees, machinery or equipment required, etc. Forming a roadmap to achieve the final goal helps the business people hire the best personnel for their form, arrange funds according to the tasks, and further invest in the most viable propositions. 4. A Measure of Success Corporate planning also acts as a yardstick to determine an organization’s success in achieving its goals. A firm shall periodically analyze its work to check its progress and make further amendments like replacing personnel, hiring more employees, arranging more funds, upgrading the machinery, etc. Finding, evaluating, and analyzing the loopholes periodically that block the ways of achieving the mission statement helps in the upgradation of the work and ensure efficiency and effectiveness of the tasks devised. The touchstone function of corporate planning works best in the organizations that devise plans that allow for changes in attaining the tasks. 5. Saves money The extra benefit associated with corporate planning is that it forms budgets that help save substantial sums. Budgeting allows a firm to allocate its financial resources to the projects that require it the most by cutting out unimportant expenses. Having a detailed budget tells how much cash is earned, spent, or lent. This wipes out confusion regarding the amount of money allocated to different projects. Objectives of corporate planning in Management Following are the basic objectives of corporate plans: 1. Setting a strategy The fundamental objective of framing a corporate plan is setting a business strategy. At this stage, companies should look at the opportunities and analyze the threats in the market. For this, they can make a SWOT analysis and select viable propositions for investing their funds. 2. Planning the operations Once a firm knows its mission statement, it can use these objectives and find ways of attaining them. The sole purpose of corporate planning is to help a firm plan and prepare a list of resources it requires to deliver to achieve its goals. 3. Monitoring and Control There should be measurable indicators present in a strategic plan to evaluate the progress of the work rate vis-à-vis the initial plans. It mainly includes financial theory related to accounts, the value of output, etc. 4. Review Establishing and forming well-devised instruments to devise annual reports is a crux to a successful corporate plan. Since the market environment constantly changes with events happening in the economy, a company regularly needs to review its plans, policies, and even rules and regulations associated with the operations. Elements of Successful Corporate Plan There are six elements in a successful corporate plan: 1. Gathering information Having all the information related to the firm, industry, and competitors are the primary step towards a well-defined corporate plan. Either a business is big or small, it should be aware of the happenings in the market in its sectors, find out opportunities, grab them at the right moment and beware of the threats. 2. Set the objectives of the plan Having a well-devised mission statement helps a firm stick to its focus of achieving it and keeps all the strategic work smooth in operations. Setting objectives helps form a clear mind about the work done, and the purpose of doing the work makes it fascinating. 3. Devise strategies to meet goals Having a blueprint helps in effectively achieving the objectives. Forming strategies define the work to be done by the employees. Managers and leaders mainly devise strategies considering the funds available, personnel in the organization, and the deadline to achieve the requisite target. It brings efficiency to the operations of a business. 4. Implementing the plan The next step is to implement the plans effectively. It involves the execution of the assigned tasks by the personnel within the guidelines and deadlines set. It involves the execution of the assigned tasks by the personnel within the guidelines and deadlines set. 5. Monitor plan performance An organization should monitor its work by forming progress reports, finding the drawbacks, and work on them immediately. 6. Evaluate the effectiveness of the plan In the end, a firm should see if the corporate strategy devised by it is competitive or up to the market standards. A plan should be challenging to achieve. A plan that is easy to achieve may not be a viable option in the existing scenario. This may require the organization to reset its plans and considering the market standards. What to include in a Strategic Corporate Plan? 1. Vision statement The vision statement of a business talks about business goals that it is supposed to achieve. While planning your corporate strategy, it is important to focus on your vision statement. You should also plan as per your short as well as long term goals. Your goals should be backed for your strategic planning, plus your goals should also be SMART. 2. Mission statement Next thing upon which you should pay heed while making corporate planning is a mission statement. It tells you how you are going to achieve your vision statement. It will let you know what you are planning to offer, the target market, and the USP of your company. It will offer an elevator pitch to your corporate planning just in a few lines. 3. Resources and scope Your corporate planning should also pay attention to things that you have in your organization such as your systems, structures, employees, products, accounting, assets, divisions, programs, finance, etc that play a key role in accomplishing your goals. You need to map the current structural existence of your organization to have a proper view of things incorporated and associated with your organization. 4. Objectives You should also include different business objectives and the ways you are going to measure success in your corporate planning strategy. Here, your objectives need to be measurable, strategic, realistic, achievable, and time-driven. Including vague objectives in your corporate planning statement is of no use here. Different types of objectives might include financial objectives, customer objectives, internal objectives, learning, and growth objectives. 5. Strategies Finally, you should include strategies that will help you accomplish your business objectives. Such strategic planning can be for launching any new product, or decreasing labour costs by a certain percentage, but your strategies have to directly address the associated objectives. You should also chalk out a proper plan for implementing those strategies. Corporate planning vs. Business Planning Business planning involves strategies that a business uses and applies to attain its goals and objectives. Corporate planning consists of strategies that the employees follow to meet the objectives of an organization. The following points highlight the difference between corporate planning and business planning: 1. Interdependency A business plan may exist without a corporate plan, but its strategies are linked with corporate plans. Without business planning, the goals and objectives of a firm would be ambiguous. Thus, both business plans and corporate plans are complementary to each other. 2. Effects A planning process aids a business to succeed in the market and suggests new directions and amendments as per the industry’s short as well as long-range requirements. Thus, there can be several diversified effects on business and corporate plans. 3. Considerations Corporate planning reviews each step of the working of an organization devised for achieving the mission statement. However, a business plan focuses on the organization’s overall goals, objectives, and progress. To evaluate the tasks, a business should consider several factors such as progress rate, personnel performance, requisite funds for further operations, and many more. .

LESSON 5:Market environment Various environmental factors affect the way a business is operated. These environmental factors can be divided into two broad categories, such as the internal environment and the external environment. A business is required to adapt to these marketing environments to stay profitable and ahead in the competition. In this article, you will learn about different types of marketing environments and various components of the marketing environment Definition The marketing environment can be defined as a combination of both internal environmental factors and external environmental factors. These marketing environments surround a business and influence the operations of the business. What is the marketing environment? A marketing environment is a combination of internal and external environmental forces and factors that influences the business operation of a business and its ability to serve its customers. It is essential to know both internal as well as external environmental factors. Therefore, enterprises keep checking on them to do their business without any legal trouble and to generate maximum profit. The internal marketing environment consists of factors like material, machines, workers, money, etc. All of these components are necessary to run a business successfully. For example, if the raw material is not available on time and in sufficient quantity, then the work of production will become slow, and the company will not be able to fulfill the demand of the product in the market. On the other hand, the external marketing environment can be divided into two categories, such as macro external marketing environment and micro external marketing environment. The microenvironment is closely related to the business and constitutes all external business activities such as distribution and promotion of products of the company. The macro-environmental components affect all the companies serving in a single industry similarly. For example, changes in the laws and rules related to production or doing business will apply to all companies likely. In the next section, you will learn about all the internal as well as external components of an organization. Components of the marketing environment There are broadly two components of the marketing environment, such as the internal environment and external environment. Different types of parts of the marketing environment are categorized under these two broad categories. The internal environment of a business can be controlled, but there is very little control of a business in the external marketing environment. Let us learn about both components one by one. 1. Internal environment The internal environment is formed of all the internal factors and forces of an organization. The internal environment of an organization is within the control of the marketer, and he can change or modify the environment as per the demand in the market and requirement of the business. The following are the five factors that form the internal environment of an organization. These factors are also referred to as five Ms of a business. 1. Money 2. Men 3. Markets 4. Materials 5. Machinery All the components of the internal environment are as important as that of the components of an external environment. However, the internal environment factors are changed according to the change in the external marketing components. For example, an organization is required to upgrade its technology if new technology in the market is introduced. The internal environment of an organization also includes the marketing department, the sales department, the human resource department, and the manufacturing department. 2. External Marketing environment The external marketing environment consists of all the external marketing factors that exist outside the organization, and the marketer has little or no control over the external marketing environment factors. The external marketing environment can be divided into two categories, such as microenvironment and the macro environment. Let us learn about both macro and micro environments one by one. A. Microenvironment The microenvironment of a business consists of all the factors and forces that are directly associated with the company. The micro components of the external environment are also known as task environments. The following are the various components of the micro external environment. 1. Suppliers Suppliers are an essential part of every organization. Suppliers supplies material and all other types of resources required for the production of products. A company can run its business successfully only if its suppliers supply material of good quality and on time. 2. Market intermediaries Market intermediaries are the intermediary parties that help a business to distribute its products in the market. The market intermediaries can be wholesalers, retailers, and distributors. All of these market intermediaries are an essential part of the business as they are the face of the company in the market and represent the products of the company in the market. 3. Partners Business partners are the business entities that conduct business with the organization. For example, advertising agencies, banking and insurance companies, market research organization s, brokers, and transportation companies, etc. A company is required to partner with several other companies to run a successful business. 4. Customers Customers are the most crucial component of the business. Customers are the target audience of the product, and the preference of customers influences all the marketing and business efforts of a company. 5. Public The public is people other than the target audience of the organization. The public plays a vital role in the success of the business as it can build or destroy the image of a company in the market. The public has the power to influence the purchasing decision of the target audience. Especially in the times of the internet, the ability to control the public has increased as they can share their views about your products and services on the internet freely. 6. Competitors The last but not least component of the microenvironment is the competitors of a business. The competitors are the other businesses that sell similar products as your products or are part of the same strategic group in the industry. B. Macro Environment Macro components of a marketing environment consist of all external forces and factors that impact the whole industry rather than just changing an organization directly. Therefore, the macro marketing environment is also referred to as a large environment. The following are the six components of the macro environment. Let us learn about them one by one. 1. Technological environment Technology is one of the elements that have great potential to influence the business of an organization. It is dynamic, as it changes rapidly. Technology provides several threats and opportunities to the business environment. The technological environment consists of research and development in technology, innovation, inducement of technology, and technical alternatives, etc. 2. Demographic environment The demographic environment component of the macro marketing environment consists of people that form a market. The population of the demographic environment can be characterized based on various factors such as age, gender, density, size, location, race, and occupation, etc. The demographic environment is a crucial component for business as the company design and builds its products based on the characteristics of the demographic environment. 3. Social-cultural environment The social-cultural component of a macro environment is formed using values, lifestyle, culture, beliefs, and prejudices of the target audience of a business. The social-cultural environment varies from one region to another region. People living in one area might prefer a different type of product than the preference of the product of the people of any other region. Businesses are required to have in-depth knowledge of the social-cultural environment to design a product or service that is preferred by most people. 4. Economic environment The economic environment component is a type of component that influences all industries. The economic environment affects the purchasing power and spending patterns of the buyers. The following are the different factors that form an economic environment. 1. Interest Rates. 2. Gross Domestic Products (GDP). 3. Gross National Product (GNP). 4. Inflation. 5. Subsidies. 6. Income distribution. 7. Government funding. 8. Other significant economic variables. 5. Political-legal environment: The political-legal environment consists of laws and policies of a country. In addition to rules and procedures, the political-legal environment also includes agencies and pressure groups. All of these political entities impact the working capacity of the industry in society. 6. Physical environment: The last component of the macro environment is the physical environment in which an organization exists. The following are the components of the physical environment. 1. Climate condition 2. Environmental change. 3. Availability of the raw material. 4. Natural resources like water. 5. pollution. Examples of the marketing environment Examples of the internal marketing environment The best example of an internal marketing environment is the office culture of the organization. Your office culture consists of the values, beliefs, and attitudes of your employees. All of these factors determine how the employees of your organization will behave. For example, in an organization where employees are encouraged to perform in a team and support the members of the group are more likely to perform better than the organization where employees compete with one another. Moreover, employees are likely to perform better in a positive internal marketing environment rather than an environment where employees are nagged continuously and pressured to perform well. Google is one of the best companies that provide a positive and very healthy internal environment to its employees. Because of this, Google is now one of the leading companies in the industry. Examples of the external marketing environment The external marketing environment of an organization is formed of micro and macro environment. The microenvironment consists of suppliers, market intermediaries, partners, customers, public, and competitors, etc. for example, suppliers of an organization alter the business environment of an organization to a certain extent. If suppliers supply good quality material and supply that material on time, then the organization can produce the right quality products and can fulfill the demand in the market efficiently. Another vital component of the micro marketing environment is the market intermediaries. The market intermediaries of your business play an essential role in the success of your business. They are the face of your company. They interact with your customers daily and understand your customers and also your product. Let us take the example of a retailer. A retailer sells products from different companies in the market. It is in the hands of a retailer to decide whether to promote your product or not. The sales of your products will significantly depend on the people who represent you in the market. Therefore, it is necessary to provide proper incentives to your representatives and provide a good margin to them on your products so that they promote your products to their customers rather than promoting the products of your competitors. On the other hand, a macro marketing environment does not affect an organization directly but affects the whole industry. An organization is required to perform its business operations according to the macro-environment factors. The examples of the macro-environment are demographic environment, social-cultural environment, economic environment, political-legal environment, physical environment, and technological environment, etc. The business operations of an organization are controlled by the laws and policies decided by the government. In addition to this, the technological environment influences the business environment more than any other macro-environment factor. A business is required to upgrade the technology that it uses for business operations from time to time in order to stay ahead in the competition. The technological environment has both advantages and disadvantages for an organization as an organization is always required to think of innovation to compete with its competitors. On the other hand, it is also costly for an organization to update its technology regularly. Importance of marketing environment The marketing environment holds great importance when it comes to conducting business successfully. Businesses of all sizes, whether small or large or required to do their business within the marketing environment. The existence of the company, its profits, and its losses largely depends on the internal as well as the external environment around it. Therefore, it becomes essential for a marketer to understand and study the marketing environment thoroughly to generate profits and stay in business for a more extended period. Let us understand why the understanding and knowledge of the marketing environment is necessary to run a successful business. 1. To learn about your competitors: A business needs to learn about its competitors to stay ahead in the competition. Different companies fight for a single opportunity in a niche market using different strategies. A deeper understanding of the marketing environment helps a marketer to learn about the business strategies and plans of their competitors. Having this knowledge helps the marketers to understand the policy of their competitors and plan their business strategies accordingly. 2. To learn about your customers: Customers are an essential part of a business. All the business activities of a company are focused on serving its customers better. Therefore, a company gives great importance to learn about their customers and their changing preferences to serve them better and to have a long relationship with them. The marketing environment helps the marketer to understand the customers and their preferences. For example, when there is a slowdown in the economy and inflation is on the surge. At such times, people either prefer to spend less or cease their spending to save money. Therefore, people look for goods and services at lower prices. Consequently, a company must either introduce new products with lower prices or sell their products at discounted prices so that they can still make sales when there is an economic slowdown. 3. Necessary for future planning A business is required to plan to meet the demand of the market and produce as per the latest trends in the market. It is essential to learn about the internal and external environment to plan efficiently. 4. To make most out of the latest trends Trends change rapidly, and the change is rapid in fashion and other similar industries. Companies that are part of such industries are required to keep a check on the changing trends. To do this, they learn about every aspect of the marketing environment so that they can prepare a foolproof plan for the future. 5. To learn about all the threats and opportunities related to business Understanding the marketing environment is necessary to learn about the risks and opportunities associated with the company. The marketer can take advantage of being a first-mover if they know the opportunities related to the business. Moreover, a business must learn about the threat associated with the company to take precautions to stay safe.

LESSON 7 Meaning of Consumer Behavior Consumer behavior simply means how consumers behave in the market. It defines the way in which consumers purchase products & services for satisfying their wants. It basically consists of likes & dislikes of customers which influence his decision while purchasing products. It is a concept which consists of many stages starting from arising of a need till purchase of a product for end-use. Different consumers respond differently to the market. It is an important concept for every business to understand its customers. This helps in better fulfilling of demands of the customers. Businesses use customer relationship management technology to understand their consumers properly. It is a database which collects & store different information about their customers. This information helps in understanding the behavior of the customers. Nature of Consumer behavior is discussed below. Nature of Consumer Behavior Complex In Nature Consumer behavior is complex in nature as all persons differ in their needs and wants. Each individual has their own unique needs and accordingly, they behave differently in the market. It is a very difficult task for marketers to recognize the needs and patterns of each individual. Therefore, it becomes an overall complex job for the business to identify each consumer’s behavior and targets them accordingly. Systematic Process Consumer behavior is a systematic process consisting of a series of steps involved in buying decisions of consumers. It is related to how consumers make their buying decision. The buying decision of consumers involves different steps which are: Need identification to buy product, searching for information related with the product, making list and evaluating different options available, finally making a purchase decision and at last post-purchase evaluation done by the marketer. Keeps On Changing Consumer behavior is always changing concept and does not remain constant. It keeps on changing with the time which is due to the following changing factors: age, income level, education level of consumer. Same products may be liked by the same consumer who once hated them. For example, Kids have more interest in toys during their childhood but as they grow up as teenagers they lose all their interest. Reflects Status The manner in which the consumer spends and makes buying decision reflects his status. Not only the behavior of the consumer is influenced by its status but his behavior also reflects his status in society. People who spend more and buy luxury items are considered rich and high-status people by society. These high-priced goods add pride to their personality. Varies From Region To Region Consumer behavior is different for different region, states and countries. It differs from place to place. Rural population tends to spend less and are basically conservative in nature. They do not like to spend on luxury items despite having enough funds due to their psychological factors. They have a different approach from an urban population related to buying decision. However, the rural population tends to spend more and buy luxury items. They even take loans to fulfill their needs for luxuries if are short of funds. Differs From Product To Product Consumer behavior varies from product to product. Same product may be attractive for one group of consumers but not for another group. A consumer may have more interest and buys more quantity of one product and buys less or even no quantity of another product. Teenagers like to spend heavily on bikes, cars, cell phones and branded clothes to look attractive, but they would not spend much on their academics. Vital For Marketers Consumer behavior is crucial for marketers to perform their duties effectively. Marketers should have perfect knowledge of their target customers buying behavior. It will help them in understanding their likes and dislikes and also the factors influencing their buying decisions. Marketer can take appropriate actions accordingly to attract customers. It helps the companies in developing the products as per peoples demand by providing information collected by them. Improves Standards Of Living Consumer behavior has an important role in improving the standards of living of people. When consumers spend more on buying different products and services, their standard of living is improved. Higher is the spending of a person, higher is the standard of living of a person. On the other hand, despite having enough funds if a person spends less than his standard of living is low. Therefore, the level of spending directly influences a person’s living standards. Importance of Consumer Behaviour Increase Sales Consumer behavior study helps the businesses in understanding their customers. They have full information about their customer’s likes & dislikes. This helps in satisfying the wants of their customers properly & efficiently. Business will offer the right product to its customers. Customers will become loyal if getting the right product. This will increase sales & revenue for business. Setting Prices Setting prices is one of the important & difficult task for any business. It directly influences the demand for its products in the market. By understanding consumer behavior, it becomes easy to determine whether the customer is price concerned or quality concerned. There are some customers in the market who buys products only because they are cheaper. Understanding their behaviour will help companies to produce as per their price limit. Designing Sales Promotion Methods Sales promotion activities are the different methods used for inducing customers to buy a product. Promotion activities are effective if they present clearly the features of the product as per customer needs. These activities should affect the psychology of customers directly & inducing them in buying. Understanding their behavior will help in easy understanding of factors affecting customers buying decisions. Helps In Competitive Analysis Facing competition in today’s market is a very tough job for every business. There is a large number of competitors available in the market offering the same products. It becomes difficult to attract customers towards your products. Understanding their behavior helps in analyzing the reasons for which they are going for competitors’ products. It helps in understanding the advantages that competitors are possessing. This help in facing the competition in a better way. Helps In Forecasting Forecasting helps in taking competitive advantages from the businesses. If the business is able to forecast about the future it can easily take several advantages. Consumer behavior enables the businesses in easy forecasting of sales & demand forecasting. It helps companies in saving their resources, time & cost. They can easily predict future demands & focus on their operations. Helps In Targeting & Segmentation Segmentation &Targeting helps in serving customers properly. It segments the customers according to their taste & class. Segmentation helps in serving the customer better. It helps businesses to focus on customers as per their needs. After understanding consumer behavior, it becomes easy to segment different customers into different classes. Helps In Designing Product Portfolio Product portfolio refers to a set of different products offered by businesses. Every business product portfolio must consist of all class of products. It should have products for all class of peoples in the market. Understanding customer behavior helps the businesses in easy understanding demand of market. This will help in proper designing of product portfolio for the businesses Major Factors Influencing Consumer Behavior 1. Psychological Factors 2. Social Factors 3. Cultural Factors 4. Personal Factors 5. Economic Factors Consumer behavior is influenced by many different factors. A marketer should try to understand the factors that influence consumer behavior. Here are 5 major factors that influence consumer behavior: 1. Psychological Factors Human psychology is a major determinant of consumer behavior. These factors are difficult to measure but are powerful enough to influence a buying decision. Some of the important psychological factors are: i. Motivation When a person is motivated enough, it influences the buying behavior of the person. A person has many needs such as the social needs, basic needs, security needs, esteem needs and self-actualization needs. Out of all these needs, the basic needs and security needs take a position above all other needs. Hence basic needs and security needs have the power to motivate a consumer to buy products and services. ii. Perception Consumer perception is a major factor that influences consumer behavior. Customer perception is a process where a customer collects information about a product and interprets the information to make a meaningful image about a particular product. When a customer sees advertisements, promotions, customer reviews, social media feedback, etc. relating to a product, they develop an impression about the product. Hence consumer perception becomes a great influence on the buying decision of consumers. iii. Learning When a person buys a product, he/she gets to learn something more about the product. Learning comes over a period of time through experience. A consumer’s learning depends on skills and knowledge. While a skill can be gained through practice, knowledge can be acquired only through experience. Learning can be either conditional or cognitive. In conditional learning the consumer is exposed to a situation repeatedly, thereby making a consumer to develop a response towards it. Whereas in cognitive learning, the consumer will apply his knowledge and skills to find satisfaction and a solution from the product that he buys. iv. Attitudes and Beliefs Consumers have certain attitude and beliefs which influence the buying decisions of a consumer. Based on this attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in defining the brand image of a product. Hence, the marketers try hard to understand the attitude of a consumer to design their marketing campaigns. 2. Social Factors Humans are social beings and they live around many people who influence their buying behavior. Human try to imitate other humans and also wish to be socially accepted in the society. Hence their buying behavior is influenced by other people around them. These factors are considered as social factors. Some of the social factors are: i. Family Family plays a significant role in shaping the buying behavior of a person. A person develops preferences from his childhood by watching family buy products and continues to buy the same products even when they grow up. ii. Reference Groups Reference group is a group of people with whom a person associates himself. Generally, all the people in the reference group have common buying behavior and influence each other. iii. Roles and status A person is influenced by the role that he holds in the society. If a person is in a high position, his buying behavior will be influenced largely by his status. A person who is a Chief Executive Officer in a company will buy according to his status while a staff or an employee of the same company will have different buying pattern. 3. Cultural factors A group of people are associated with a set of values and ideologies that belong to a particular community. When a person comes from a particular community, his/her behavior is highly influenced by the culture relating to that particular community. Some of the cultural factors are: i. Culture Cultural Factors have strong influence on consumer buyer behavior. Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near family members and other important people around them. ii. Subculture Within a cultural group, there exists many subcultures. These subcultural groups share the same set of beliefs and values. Subcultures can consist of people from different religion, caste, geographies and nationalities. These subcultures by itself form a customer segment. iii. Social Class Each and every society across the globe has form of social class. The social class is not just determined by the income, but also other factors such as the occupation, family background, education and residence location. Social class is important to predict the consumer behavior. 4. Personal Factors Factors that are personal to the consumers influence their buying behavior. These personal factors differ from person to person, thereby producing different perceptions and consumer behavior. Some of the personal factors are: i. Age Age is a major factor that influences buying behavior. The buying choices of youth differ from that of middle-aged people. Elderly people have a totally different buying behavior. Teenagers will be more interested in buying colorful clothes and beauty products. Middle-aged are focused on house, property and vehicle for the family. ii. Income Income has the ability to influence the buying behavior of a person. Higher income gives higher purchasing power to consumers. When a consumer has higher disposable income, it gives more opportunity for the consumer to spend on luxurious products. Whereas low-income or middle-income group consumers spend most of their income on basic needs such as groceries and clothes. iii. Occupation Occupation of a consumer influences the buying behavior. A person tends to buy things that are appropriate to this/her profession. For example, a doctor would buy clothes according to this profession while a professor will have different buying pattern. iv. Lifestyle Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behavior is highly influenced by the lifestyle of a consumer. For example when a consumer leads a healthy lifestyle, then the products he buys will relate to healthy alternatives to junk food. 5. Economic Factors The consumer buying habits and decisions greatly depend on the economic situation of a country or a market. When a nation is prosperous, the economy is strong, which leads to the greater money supply in the market and higher purchasing power for consumers. When consumers experience a positive economic environment, they are more confident to spend on buying products. Whereas, a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing power. Economic factors bear a significant influence on the buying decision of a consumer. Some of the important economic factors are: i. Personal Income When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable income refers to the money that is left after spending towards the basic needs of a person. When there is an increase in disposable income, it leads to higher expenditure on various items. But when the disposable income reduces, parallelly the spending on multiple items also reduced. ii. Family Income Family income is the total income from all the members of a family. When more people are earning in the family, there is more income available for shopping basic needs and luxuries. Higher family income influences the people in the family to buy more. When there is a surplus income available for the family, the tendency is to buy more luxury items which otherwise a person might not have been able to buy. iii. Consumer Credit When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy installments, bank loans, hire purchase, and many such other credit options. When there is higher credit available to consumers, the purchase of comfort and luxury items increases. iv. Liquid Assets Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are those assets, which can be converted into cash very easily. Cash in hand, bank savings and securities are some examples of liquid assets. When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods. v. Savings A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in saving more, then most of his income will go towards buying products.

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